Stocks have moved mostly higher in early trading on Tuesday amid optimism about the likelihood of further stimulus from the Federal Reserve. The major averages have all moved to the upside after ending the previous session mixed.
The major averages are currently posting notable gains, near their highs for the young session. The Dow is up 66.45 points or 0.5 percent at 12,808.27, the Nasdaq is up 24.03 points or 0.8 percent at 2,919.36 and the S&P 500 is up 9.18 points or 0.7 percent at 1,353.96.
The early strength on Wall Street comes as the Federal Reserve convenes a two-day monetary policy meeting, with the central bank expected to announce additional measures to stimulate the economy following the end of the meeting on Wednesday.
A recent batch of disappointing economic data has added to the optimism about further stimulus amid continued concerns about the impact of the ongoing financial crisis in Europe.
The Commerce Department released a report before the start of trading showing a decrease in housing starts in the month of May, although the drop came from a notably upwardly revised level in April.
The report showed that housing starts fell 4.8 percent to an annual rate of 708,000 in May from the revised April estimate of 744,000. Economists had expected housing starts to edge up to 720,000 from the 717,000 originally reported for the previous month.
At the same time, building permits, an indicator of future housing demand, jumped 7.9 percent to an annual rate of 780,000 in May from the revised April rate of 723,000. Building permits had been expected to climb to 736,000.
Software stocks have shown a strong upward move in early trading, driving the Dow Jones Software Index up by 2.7 percent. Oracle (ORCL) is leading the sector higher after reporting better than expected fourth quarter results.
Considerable strength has also emerged among banking stocks, with the KBW Bank Index advancing by 1.4 percent. The strength in the sector reflects the optimism about further stimulus from the Fed.
Steel, chemical, healthcare, and brokerage stocks are also seeing early strength, moving higher along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index ended the day down by 0.8 percent, Singapore's Straits Times Index advanced by 0.6 percent.
Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index is up by 1.2 percent, the German DAX Index is up by 0.9 percent and the French CAC 40 Index is up by 0.4 percent.
In the bond market, treasuries have moved modestly lower after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.4 basis points at 1.608 percent.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis